The Bangko Sentral ng Pilipinas (BSP) wants to suspend the registration of new payment system operators for a year, as part of tighter safeguards meant to make merchant payments traceable and curb fraud and illicit transactions, according to Philstar.

Payment system operators are entities that run arrangements enabling payments and fund transfers.

“The suspension is being imposed to facilitate the BSP’s holistic review of the OPS taxonomy and licensing framework, including the attendant risk management and regulatory considerations,” BSP said.

Applications received before the suspension will continue to be evaluated, though none can be approved or denied until the pause is lifted. The suspension would run for 12 months once in effect.

The draft circular would also require BSP-supervised institutions to identify the actual merchant behind a payment and the party ultimately entitled to receive its proceeds, according to BusinessWorld.

Banks and payment providers could still use intermediaries between them and a merchant, but only if every intermediary holds authorisation and payment flows remain fully traceable to the merchant.

The rules would bar intermediaries from subcontracting merchant acquisition further down the chain.

Financial firms could only onboard certain high-risk businesses, including casinos, gambling operators, virtual asset service providers and remittance companies, through direct arrangements, with closer monitoring and transaction limits proportional to their risk.

Separately, BSP proposed a National QR Code Merchant Database consolidating merchant identities, registration details and risk classifications for businesses accepting national QR code payments.

Supervised entities would also need to report major fraud, sanctions breaches or cybersecurity incidents to BSP within 24 hours of detection.

Featured image: Edited by Fintech News Philippines based on images by wavebreakmedia-micro via Magnific and Bangko Sentral ng Pilipinas via Facebook.